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Town of Norwood gets bad news cheap with Building 19 bankruptcy
By adamg on Mon, 11/04/2013 - 6:40pm
Sunday in Norwood.
One of Building 19's largest unsecured creditors is the town of Norwood, owed $306,651 in back taxes, according to a listing filed by the company in US Bankruptcy Court in Boston on Friday.
The company, which blames competition from the Internet, actually owes New Bedford even more - some $353,000.
The largest creditor, however, is Building 19 president William Elovitz - son of founder Jerry Ellis - who says he is owed $4.8 million for loans to the company. He's listed as a "secured" creditor, which means he will get priority in divvying up the remains of Building 19 over Norwood, New Bedford, the city of Pawtucket, NStar, the state Department of Revenue and other unsecured creditors.
The company says it employs 99 full- and part-time workers, all of whom will be out of work if the company goes through its plans to liquidate.
Inside the Norwood Club 19 yesterday:
Neighborhoods:
Topics:
Free tagging:
| Attachment | Size |
|---|---|
 Building 19's unsecured creditors | 230.6 KB |
| Building 19's main filing | 200.2 KB |
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Comments
What sort of Red Sox merchandise are they selling
and for how much?
Couple of things
Small framed photos of various Sox in the field for $9.95 (supposedly $29.95 elsewhere) and a variety of T-shirts expressing disdain for the Yankees (some read, as you'd expect, "Yankees suck!" but they also had some milder "Yankees stink!" shirts). I didn't look at the prices for those.
How do they owe property taxes when they don't own real estate?
The bankruptcy filing says that they lease all of their stores, their warehouse, and their corporate headquarters. They don't own any real estate. So how do they come to owe property taxes to Norwood, New Bedford, Natick, and Pawtucket? Isn't it the landlord's obligation, not the tenant's, to pay property taxes?
Many commercial leases are
Many commercial leases are "net leases" where the tenant is responsible for certain expenses, which often include property taxes.
Personal Property taxes
Businesses in Massachusetts (but not homeowners) are liable for personal property taxes, payable to the municipality where they are located. I believe the rate is the same as that municipality's rate for real estate taxes. The tax applies to the value of inventory, fixtures, equipment, and so on, located within that municipality's borders. The tax is applicable whether the business is set up as a corporation, partnership, or sole proprietorship.
Oh good, Im glad the
Oh good, Im glad the millionaire will get money before cities and small businesses that are going to be screwed by this bankruptcy filing.
The Town will get paid.
This just delays the Town's efforts to collect the outstanding taxes. If a tax lien case has been filed in Land Court, the case will be stayed for the duration of the bankruptcy, if an instrument of taking has been filed at the Registry of Deeds, the town won't be able to file a tax lien case (to foreclose all rights of redemption under the taking) at Land Court until the bankruptcy is discharged (the stay, however, does not stop the statutory 16% interest assessed to outstanding property taxes from accruing). Tax titles on properties are not subject to discharge by the Bankruptcy Court, in fact, pretty much all liens, including federal and state liens on property are inferior to a municipal tax title (IE, a city or town forecloses under Chapter 60, it obtains full and clean title to the property -all existing liens are wiped out). If the lessee is responsible by the terms of their lease for the taxes and then doesn't pay them, it doesn't really matter (and other than sending out the tax bills, the Town probably doesn't care), the lien follows the property, not the taxpayer. Any agreements to pay the property taxes are between the lessee and lessor.
Great info. Then who does pay
Great info. Then who does pay the town eventually? The landlord that leases the property to B19?